Dennis McCaffrey, SVP of Enterprise Sales at RXO, discussed XPO's strategic evolution and the company's shift from an asset-light brokerage rollup to a more asset-heavy logistics model after the acquisition of Con-way, a major U.S. less-than-truckload carrier that XPO purchased in 2015 for approximately $3 billion. McCaffrey said the original plan under Brad Jacobs was to build a large freight brokerage platform, but that the strategy changed as the business expanded and as Jacobs saw the value of asset-based operations.

When Jacobs arrived at what was then a roughly $175 million company in 2011, he told the team he wanted to build a $4 billion to $5 billion enterprise. According to McCaffrey, the early roadmap focused on rolling up asset-light freight brokers. That approach was reflected in acquisitions such as 3PD for last mile, Pacer for intermodal drayage using owner-operator contractors, and New Breed for warehousing.

McCaffrey said the turning point came with the Norbert Dentressangle acquisition in Europe. Through that deal, Jacobs saw the influence that Norbert's asset-based trucking division had with global customers. That experience, McCaffrey said, helped open the door to pursuing a full LTL network and ultimately influenced the broader shift in strategy.

"The biggest driver of EBITDA — and Mario now has taken that to all new heights and done an incredible job with XPO — was that network," McCaffrey said, referring to Mario Harik, who led XPO's LTL business and now serves as the company's CEO. "We could maximize utilization, drive the yield and volume through that network and really drive a lot of cash flow and a lot of EBITDA."

McCaffrey said the logic for rolling up truckload brokers was less compelling because overlapping customer bases often limited synergy. He pointed to RXO's later acquisition of Coyote as an exception, noting that the two brokerages had only about 30% customer overlap and roughly 30% carrier-base overlap, which made it a cleaner combination than most brokerage mergers. RXO acquired Coyote Logistics from UPS in 2023, a deal that significantly expanded its brokerage scale.

He also said XPO's sale of CFI's full truckload operation underscored how the company viewed the economics of that segment. In his view, full truckload did not fit as well as LTL and managed transportation. He said the mode's operating ratios were less attractive and that customer value was harder to differentiate when a truckload brokerage overlapped with an asset-based carrier.

In 2021 and 2022, XPO separated into three independent publicly traded companies: GXO Logistics for contract logistics, RXO for freight brokerage and managed transportation, and XPO for LTL. Today, RXO describes itself as the third-largest freight broker and one of the largest managed transportation providers, with more than $4 billion in freight under management. McCaffrey said RXO's managed expedite platform sits within that business and that the company remains one of the largest single-transaction expedite providers in the market. He added that RXO is exploring ways to use that technology in the spot market.

RXO's last mile division is another major part of the company's platform. McCaffrey said the unit handles more than 30,000 home deliveries per day across more than 70 hubs in North America. He acknowledged that demand has been somewhat soft because appliance sales are down year over year, a trend consistent with the broader pullback in big-ticket consumer goods spending following the pandemic-era surge. But he said last mile remains a high-demand business. RXO is also working to connect its last mile hub network with its LTL TMS to offer big-and-bulky transactional LTL services, a product McCaffrey said is attracting interest from retailers.

McCaffrey, a Marine Corps veteran, said he entered the freight industry after taking a job with a small brokerage and trucking operation while attending college. Over time, that business changed hands and eventually became part of the Express One lineage before being acquired by Brad Jacobs. He said much of his own career has been in sales and commercial roles focused on customers and growth.

Looking back on the rapid expansion under Jacobs, McCaffrey said the scale of the ambition was striking. He noted that the company completed 17 acquisitions in six years, while also producing double-digit organic growth. In his view, Jacobs stood out for his work ethic, focus, and ability to attract strong talent.

"Brad has a great keen eye for talent," McCaffrey said. "He always surrounds himself with A-players."

McCaffrey said RXO's broader competitive advantage lies in offering a wide range of services rather than only truckload brokerage. In addition to brokerage and managed transportation, he said the company offers dedicated transportation and dedicated contract carriage, which he said is drawing more attention as customers try to lock down capacity.

He said that when working with customers, RXO's approach is to listen first and understand the supply chain challenges they are trying to solve. The goal, he said, is to design solutions that fit the customer's network rather than simply present a list of services.

For the next 12 to 18 months, McCaffrey said he expects capacity to keep tightening under ongoing regulatory pressure, a dynamic that historically has shifted pricing power toward carriers and brokers with strong network coverage. If volume rises in that environment, he warned, shippers could face a difficult operating backdrop. He said dedicated contract carriage is already gaining interest as customers look for ways to secure capacity.

"I don't think it's going to get any easier," McCaffrey said. "If the capacity is going to continue to get tighter and we get any volume spike whatsoever, then it's going to be a very big challenge."